Sensex plunged 1,953 points to open at 74,751, while Nifty 50 declined over 580 points to begin the session at 23,198. The sharp selloff wiped off more than Rs 7 lakh crore in just a few minutes since opening from the total market capitalisation of all companies listed on BSE, dragging it down to Rs 432 lakh crore.
All 30 constituents of Sensex were in the red, with heavyweight HDFC Bank shares leading losses by falling around 8%. Larsen & Toubro (L&T), Axis Bank, Adani Ports, Zomato-parent Eternal and Kotak Mahindra Bank followed, plunging 2-3%.
All sectoral indices on NSE opened in the red, with Nifty Realty leading losses after crashing more than 3%. Nifty Auto and Nifty Private Bank closely followed, dropping nearly 3% each. Around 2,192 stocks declined on NSE, while 256 advanced and 62 remained unchanged.
Here are 6 factors pushing markets down today:
Live Events
1) Oil soars back above $110
Oil prices soared back above the $110-level after a brief pause in the mind-boggling rally that began earlier this month with the rising hostilities in the oil-rich Middle East and prolonged closure of the Strait of Hormuz.
Qatar’s state oil giant QatarEnergy said Iranian missile attacks on Ras Laffan, which houses the country’s core LNG processing operations, caused “extensive damage”, while the UAE shut gas facilities after intercepting missiles early on Thursday. US President Donald Trump, meanwhile, warned Iran not to attack Qatari LNG facilities again and threatened to “massively blow up the entirety of the South Pars Gas Field” if it did so. He said Israel had attacked South Pars without informing Qatar or the United States.
Notably, Indian stock markets had seen a massive selloff in the first two weeks of March, with Sensex and Nifty crashing around 10% each amid rising oil prices during the crisis.
2) Fed’s inflation worries
US Federal Reserve Chair Jerome Powell announced the American central bank’s decision to keep policy rates unchanged, as inflation is not coming down as much as they had hoped amid rising geopolitical tensions in the Middle East and President Donald Trump’s tariff flip-flops.
The Federal Reserve yesterday kept its policy rate unchanged in the range of 3.50-3.75%, and projected higher inflation, steady unemployment and a single reduction in borrowing costs this year. In the near term, higher energy prices will push up overall inflation, but it is too soon to know the scope and duration of the potential effects on the economy,” Powell said in a press conference after Fed’s 11-1 decision to maintain its benchmark overnight interest rate unchanged.
“The thing I really want to emphasise is that nobody knows: the economic effects could be bigger, they could be smaller; they could be much smaller or much bigger; we just don’t know,” Powell said. His comments came on the back of soaring oil prices, with Brent crude rallying over $110 per barrel last week as the US’ war with Iran led to the prolonged closure of the Strait of Hormuz.
Fed policymakers now expect inflation to stand at 2.7% at the end of the year, higher than the 2.4% projected in December. This reflects the fallout from the spike in global oil prices that followed the start of war in the oil-rich Middle East. But the higher inflation projections also are due to stickier tariff-driven inflation slowing progress towards the Fed’s 2% inflation goal, Powell said. Economic growth was upgraded slightly, to 2.4% for 2026 versus 2.3% in December, and the projected unemployment rate was unchanged at 4.4%.
3) Sharp selloff in heavyweight HDFC Bank shares
HDFC Bank shares crashed nearly 8% on Thursday morning after the bank announced that its part-time Chairman and independent director Atanu Chakraborty, has stepped down, and former CEO Keki Mistry has been appointed interim part-time chairman with approval from RBI.
In his resignation letter, Chakraborty said that certain developments and practices within the bank over the past two years did not align with his personal values and ethics. “This is the basis of my aforementioned decision,” he wrote.
Notably, HDFC Bank is one of the top heavyweights on benchmark indices. Hence, the sharp fall in the private lender’s stock may have pulled down Sensex and Nifty, while dragging down investor sentiment.
4) Global markets in red
Wall Street crashed on Wednesday after higher inflation projections and no rate cuts by the US Federal Reserve. The S&P 500 declined 1.36% to end the session at 6,624.7, its lowest closing level in nearly four months. Tech-heavy Nasdaq declined 1.46%, while the Dow Jones Industrial Average declined 1.63%.
Japan’s Nikkei tumbled around 2.5%, and South Korea’s Kospi fell over 1% on Thursday morning. Hong Kong’s Hang Seng meanwhile was down 1.4%. European markets closed in the deep red yesterday, with UK’s FTSE 100 and Germany’s DAX falling nearly 1% each.
5) Profit booking
The sharp fall in Indian stock markets may have also been driven partially by profit booking. Despite rising hostilities in the Middle East, Indian benchmark indices Sensex and Nifty had staged a partial recovery over the past three sessions. Sensex gained nearly 3,000 points between Monday and Wednesday, and Nifty 50 briefly reclaimed 23,850 despite technical indicators warranting caution.
6) Rupee headed for more decline?
Indian rupee sank to a fresh lifetime low of $92.63 per barrel on Wednesday. While forex markets are closed today, experts expect the Indian currency to face more pressure from the elevated oil prices. ”Persistent pressure from a rising import bill continues to weigh on the currency. Elevated crude oil prices, coupled with ongoing shipment disruptions through the Strait of Hormuz, are increasing concerns over sustained higher import costs for India,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
“The macro backdrop remains unfavourable, with crude likely to stay elevated for a prolonged period, keeping the rupee under pressure. In the near term, the rupee is expected to trade within a weak range of 92.25–92.95 against the US dollar,” he added.
What lies ahead?
The uncertainty surrounding the war has turned worse with Israel hitting the world’s largest LNG refinery in Iran. “This is bad news for oil and gas importers like India. If Brent remains above $110 for an extended period of time, that will have negative implications for India’s macros. India’s GDP growth and corporate earnings in FY27, too, will be impacted. But this scenario need not play out in the fast changing scenario,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
“A prolonged war is no one’s interest. Therefore, a sudden end to the war bringing crude prices sharply down cannot be ruled out. The market has been exceedingly volatile in response to developments on the war front and crude prices. The last three days of recovery in the market is likely to be wiped out if the war escalation continues,” he added.
According to Vijayakumar, the negative reaction of the US market was more in response to the escalation of the war rather than the Fed’s commentary, as the mildly hawkish stance of the American central bank and the decision to keep rates unchanged were expected.
Technical view
After coming to the vicinity of the 10 day sma, bullish exhaustion became visible yesterday for Nifty which ran up nearly 900 points in the span of three days, said Anand James, Chief Market Strategist at Geojit Investments. “We will now wait for a break below 23,111, Monday’s open, to signal a collapse. Until then, investors should expect wild swings, with VIX near 19. The upswings that may be expected early in the day may require to push above 23,450 for seeing strength, he added.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)